Regional integration and the challenge of overlapping memberships on trade

Despite a plethora of policy and scholarly discussions on how overlapping memberships affect the implementation of rules of origin meant to facilitate trade within regional trade agreements (RTAs) of developing countries, there has yet to be any theory development or empirical test to verify these claims. This article re-examines these previous discussions and articulates and empirically tests a theoretical model on the effects that overlapping memberships have had on intra-RTA trade. Using measures of overlapping memberships at both the RTA and country levels of analysis, I find that overlapping memberships in RTAs involving developing countries have had a negative effect on intra-RTA trade levels. These findings shed light on steps developing countries can take to address overlapping memberships and strengthen regional integration at a time when there is a push for north-south trade agreements such as those the European Union is negotiating with several of these developing countries.